June 2010

[Amber]

Heavy rain to wash out Prairie seeding plans

WINNIPEG - Heavy rain across much of the Prairies will hamper farmers who had been hoping to squeeze in more hectares ahead of Sunday`s final crop insurance deadlines.

Environment Canada has issued rainfall warnings for central and southwestern Saskatchewan, west-central Manitoba and southern Alberta, as rain moves from northeastern Montana across Canada`s main crop-growing belt Thursday and Friday.

The rain adds to record amounts of precipitation across much of the Prairies this spring, which have the Canadian Wheat Board forecasting the largest unplanted acreage in 39 years.

Canada is the world`s largest exporter of spring wheat, durum and canola.

Many Prairie areas are forecast to receive 50 to 75 millimetres of rain into Friday, but Alberta could see 100 mm in the Lethbridge area.

Most of the unplanted area is in Saskatchewan.

Rain reached southern Saskatchewan overnight and the heaviest rain is expected along the Alberta-Saskatchewan boundary and from west to east in Saskatchewan from Kindersley through Saskatoon, Wynyard and Kamsack, Environment Canada said.

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[Amber]

R&D gives Cenovus an edge in oil sands marathon

CALGARY - After little more than six months as a publicly traded company, Encana oilsands spinoff Cenovus released the results of its first full, external evaluation of bitumen reserves -- and it`s a number that is going to keep Cenovus busy for years to come.

According to engineering firm McDaniel & Associates, and taking into account existing technology and extraction methods, Cenovus estimates 18 billion barrels can be extracted from its lands; its production is expected to reach 300,000 barrels a day by 2019.

That number puts Cenovus in league with Suncor Energy, and well ahead of other oilsands players such as Canadian Natural Resources, Syncrude and Athabasca Oil Sands.

What Cenovus believes sets it apart from its competitors -- aside from its assets and the fact that 47 per cent of its land base is royalty-free -- is its focus on technology. To that end, the company has set a goal of implementing at least one new commercial technology every year.

"I often refer to Cenovus as a technology company with oil and gas assets," said Brian Ferguson, Cenovus president and chief executive, from his 40th floor offi ce in downtown Calgary on Wednesday.

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[Amber]

Calgary`s downtown office vacancy rate may near 20% in 2012

EnCana`s Bow Tower may push market down despite strong fundamentals

CALGARY - Calgary`s downtown office market experienced the greatest turbulence in the country due to last year`s recession, says a report released today by commercial real estate firm Cushman & Wakefield.

In its Outlook 2010 mid-year report, the company said the city`s central office market could see the vacancy rate approach 20 per cent when the 1.9 million square foot Bow Tower opens in early 2012.

"Propelled by record natural gas prices in 2005, alongside buoyant oil prices, explosive office demand squeezed the downtown core vacancy to 0.1 per cent," said the report. "What followed was a frenetic development cycle that will see about 7.5 million square feet added to Calgary`s downtown office inventory.

"Fast forward to 2010 and many of these developments are just coming to completion at a time when recovery from the recession has barely taken hold."

But there are silver linings, said the report.

"Calgary`s business fundamentals remain strong and layoffs were surprisingly limited, indicating long-term business confidence."

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[Amber]

$800M pledged for local transit

Region getting more money than expected

The Calgary region is receiving more than its leaders expected from a long-promised provincial transit fund that will bring intercity bus service and bolster Calgary Transit.

It also brings closer the dream of regional rail and a southeast C-Train line, but the $800 million pledged Tuesday to the Calgary region isn`t enough to guarantee that future.

"I can assure you that we will have more projects available for you than there is funding available, and I think that speaks definitely to the need," Mayor Dave Bronconnier said in Edmonton at Transportation Minister Luke Ouellette`s funding announcement.

What came out Tuesday was the long-delayed details of a $2-billion funding pledge the Stelmach government made two years ago in rosier economic times.

Calgary-area politicians had been expecting only a third of that fund, with equal portions going to the capital region and the rest of Alberta.

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[Amber]

Cancer clinic a `landmark` for Lethbridge

Facility will ease demand in Calgary

A new radiation centre unveiled in Lethbridge on Tuesday is expected to bring cancer treatment closer to home for hundreds of southern Albertans.

It will also release "pent-up demand" for Calgarians waiting for therapy at the overloaded Tom Baker Cancer Centre, top health officials say.

The $52.3-million upgrade at the Lethbridge Cancer Centre makes it the first community in Alberta outside of Calgary and Edmonton where patients can access radiation treatment.

Local residents who have had to trek to Calgary for radiation have been lobbying for the facility for years, collecting thousands of signatures for a petition sent to the legislature.

The new radiation centre means they won`t have to leave behind family and friends for treatment, often for as long as six weeks at a time, said Alberta Health Service`s vice-president of cancer care.

The emotional and financial burden was a difficult one for cancer patients, said Dr. Tony Fields.

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[Amber]

Calgary will lag national growth rate with `tepid` pace of recovery: report

Calgary`s economy is performing at a "tepid" pace this year, one that will likely be the new norm for the city for a few years to come as the global economy finds its footing again, says a report to be released today.

Calgary Economic Development says the city can expect only 0.8 per cent to 1.2 per cent real GDP growth this year.

"Calgary`s economy really has not been performing at a level equivalent to the recovery being seen in Canada overall," says the State of the Economy, semi-annual review.

"Economic recovery will happen in Calgary when, like elsewhere, companies begin to hire again. . . . Calgary companies have not returned to hiring mode yet."

The CED report says the city`s economy contracted by 3.1 per cent in 2009. During the boom, it soared by 6.9 per cent in 2006.

The report paints a much more sobering picture of Calgary`s economy for this year compared with recent economic forecasts by the major banks. For example, Scotiabank is forecasting Alberta`s economy will lead the nation this year with 4.1 per cent GDP growth and 3.4 per cent growth in 2011 -- tied with Saskatchewan for the best in Canada.

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[Amber]

Oil industry supports carbon tax

The head of Canada`s largest integrated oil company on Tuesday came out in favour of a carbon tax as part of a national energy strategy to reduce emissions and promote "responsible" energy development, but provincial government representatives quickly shot down the idea.

Speaking at an environment conference in Calgary, Suncor CEO Rick George said he would support a carbon tax if the fiscal burden was evenly shared between industry and consumers and applied evenly across the country.

"I`m not necessarily opposed to a carbon tax, but what we have to do is tax all carbon equally," he told reporters. "A molecule of carbon is the same whether it`s produced out of an oilsands plant or the tailpipe of your car."

During his speech, George complained of a patchwork of regulations across the country and said he supports harmonizing policies between provinces and even major trading partners such as the United States.

But Doug Horner, Alberta`s deputy premier and minister of Advanced Education, Industry and Technology, flatly dismissed the idea of a tax on consumers and bristled at the suggestion of a national energy policy beyond simple co-operation between provinces and the federal government on energy issues.

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[Amber]

Alberta gains appeal for energy investment

Calgary –– Alberta is doing better as a preferred destination for energy investment in 2010, but the heart of Canada`s oilpatch still trails Manitoba, Saskatchewan and British Columbia as an attractive place for oil and gas companies to spend money, a Fraser Institute survey released Thursday shows.

According to the Global Petroleum Survey, Alberta moved up from last place among Canadian provinces but remains well behind its western counterparts among 645 oil executives and managers polled.

Study author Gerry Angevine attributed Alberta`s poor showing in 2008 and 2009 to the provincial government`s waffling over royalties, which he described as "an unpleasant and costly roller-coaster ride," and suggested this year`s results show a preliminary level of satisfaction with the new royalty concessions made earlier this spring.

Globally, Manitoba moved up to eighth overall from 21st in 2009. Saskatchewan ranked 17th, up from 38th in 2009. Ontario, Yukon Territory, Newfoundland and Labrador, British Columbia and Nova Scotia also all beat Alberta, which ranked 60th this year compared to 92nd in 2009.

According to the survey, the top 10 most attractive jurisdictions for investment are South Dakota, Texas, Illinois, Wyoming, Austria, Mississippi, Utah, Manitoba, Oklahoma, and Alabama.

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[Amber]

Edmonton International has the potential to spin off a city-within-a-city

Think airports are little more than flying-bus stations where you go to catch a flight or pick up arriving relatives?

That`s so 20th century.

A concept gaining prominence and espoused by experts such as John Kasarda, a professor at the Kenan Institute of Private Enterprise at the University of North Carolina, says airports are the anchors of 21st-century urban development.

They`re what seaports were to 17th-century economies, railways to the 1800s and highways to the 20th century.

"An airport is not an airport. You have to understand that. If you think that it is, you`re back in the 20th century," Kasarda said Wednesday.

Airports are the fastest-growing centres of development because they`re suited to modern economies` demands for global access, speed, agility, connectivity and the rapidly burgeoning tourism industry soon to be bolstered by millions of Chinese, Kasarda says.

"Airports and air routes have really become the physical Internet that moves products and people quickly over long distances.

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[Amber]

City council nixes bus service to Edmonton International Airport

EDMONTON — The wheels on the bus won`t go round and round to the Edmonton International Airport after councillors turned down a proposed transit trial route to the facility.

Transportation officials had recommended testing daily, half-hour service from the Century Park LRT station for 18 months. They had suggested starting the service in the fall if the airport covered half the $982,000 cost.

Several council members argued Wednesday the scheme should be given a chance, saying the subsidy estimate was based on carrying a conservative average of five passengers a trip.

Edmonton is the only major Canadian city without public transit to its airport, meaning it has a "poverty of options" for reaching an important location, Coun. Ben Henderson said.

"At some point, we have to grow up as a city and make these choices. I think ultimately we will have higher ridership than projected."

A return taxi ride to the airport from downtown costs about $100, while a round trip with the private Edmonton Sky Shuttle is $25.

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[Amber]

Alberta mortgage fraud ringleader sentenced to three years

EDMONTON — A ringleader in a $3.92-million rural Alberta mortgage fraud was sentenced Wednesday to three years in prison.

Court of Queen`s Bench Justice Richard Marceau said Eugene Chamczuk must serve time in prison to deter him from getting involved in more scams and to reflect society`s condemnation of such crimes.

"White-collar crime is very serious," Marceau said.

Chamczuk, 40, pleaded guilty in November to several counts of fraud over $5,000 for his involvement in 32 fraudulent mortgage transactions between 2000 and 2002 in the villages of Warburg and Empress.

Marceau said the frauds were carried out over two years and involved a "grave" amount of money, which were aggravating factors in the case.

According to an agreed statement of facts presented in court, Chamczuk and James Steinhubl owned a company called Canada Best Homes, which owned lots in Warburg and Empress.

Chamczuk approached residents, called straw buyers, and convinced them to use their good credit to get mortgages on the properties for people who couldn`t obtain the loans themselves. He told the straw buyers their false representations to banks were legal.

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[Amber]

Edmonton on track for 5% tax hike for 2011

Councillors question proposed increase in transit fares

EDMONTON — Edmonton homeowners are on track for an average five-per-cent property tax hike next year under guidelines approved Wednesday by city council.

Although preliminary numbers pegged the 2011 increase at 10.5 per cent, spending cuts and higher revenues proposed by the administration would chop that figure roughly in half.

But some councillors were wary of one recommendation that would boost transit fares more than $1 million above next year`s already-scheduled increase.

Under a plan adopted in 2007, several fares, including monthly and annual senior passes, are set to go up in 2011. The five-year timetable will see adult monthly passes rise $30, to $89, by 2012, with cash fares going to $3 from $2.50, in order to have passengers cover a larger share of transit costs.

Coun. Amarjeet Sohi doesn`t want to speed up that process. "I`m very uncomfortable with increasing transit fares at a time when we`re trying to encourage more people to use transit," he said. "I think this would curtail some of the growth we`re seeing in people using transit ... it makes absolutely no sense."

While Coun. Don Iveson said he`s willing to look at details that will come out in November`s draft budget, he said he isn`t enthusiastic about raising fares faster. "People have noticed that fares are going up and service is going sideways."

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[Amber]

Chavez to nationalize 11 oil rigs

CARACAS - Venezuela will nationalize a fleet of oil rigs belonging to U.S. company Helmerich & Payne Inc., the latest takeover in a push to socialism as President Hugo Chavez struggles with lower oil output and a recession.

A former soldier inspired by Cuba`s Fidel Castro, Mr. Chavez has made energy nationalization the linchpin in his `revolution.` He has also taken over assets in telecommunications, power, steel and banking.

The 11 drilling rigs have been idled for months following a dispute over pending payments by the OPEC member`s state oil company PDVSA. Oil Minister Rafael Ramirez said on Wednesday the rigs, the Oklahoma-based company`s entire Venezuelan fleet, were being nationalized to bring them back into production.

Mr. Ramirez said companies that refused to put their rigs into production were part of a plan to weaken Mr. Chavez`s government,

"There is a group of drill owners that has refused to discuss tariffs and services with PDVSA and have preferred to keep this equipment stored for a year," Mr. Ramirez told reporters in the oil producing state of Zulia.

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[Amber]

Oil sands, taxes boost Alberta ledger

EDMONTON - Alberta`s financial picture is a lot rosier than initially anticipated, with higher-than-expected oil sands royalties and income tax revenue in the 2009-10 fiscal year improving the provincial government`s ledger and reducing the deficit to $1-billion.

Yesterday`s release of the province`s 2009-10 annual report for the fiscal year ending March 31 this year reveals total government revenue was about $35.6-billion, $4-billion more than budgeted, buoyed by higher corporate tax revenue, oil and oil-sands royalties.

The additional cash sharply trimmed the deficit for last fiscal year to slightly more than $1-billion -- down dramatically from the budget estimate of $4.7-billion, and a forecasted shortfall of $3.6-billion in the third-quarter update three months ago.

It also leaves the province, and the Conservative government of Premier Ed Stelmach, with about $15-billion still socked away in its rainy-day Sustainability Fund (down from about $17-billion to start the fiscal year), a savings account used to cushion the government`s revenue stream during periods of volatility.

The province initially expected to tap the Sustainability Fund for an additional $4.6-billion last year.

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[Amber]

Firm says it has a new technique to process oilsands bitumen

Company won`t give details, applies for pilot project

Privately held Value Creation Inc. announced on Monday that it has filed applications for a pilot project to demonstrate new field upgrading technology that could change the way heavy oil is produced and processed.

The company said it has asked Calgary`s Energy Resources Conservation Board to consider an application to build a 1,000 barrels per day thermal pilot project on its Tristar leases near Fort McMurray in northeastern Alberta. It contain two billion barrels of bitumen.

The wells will use the proven steam assisted gravity drainage method of producing in situ bitumen, but Value Creation CEO Columba Yeung said the pilot project will also feature a proprietary upgrading technology to improve the oil quality as it comes out of the ground.

In an interview, Yeung declined to give too many details on the technology other than to say that it could revolutionize heavy oil and bitumen production.

"It`s a hard-to-believe feature that we can take oil and gas and upgrade it right at the wellhead," he said. "It`s a really unique feature and we decided to show it in the field. Such a demonstration would be useful for investors."

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[Amber]

Alberta population gain tumbles

Net influx of 300 new residents province`s lowest in 16 years

EDMONTON — Alberta appears to have lost its lustre as a destination for Canadians -- it attracted fewer interprovincial migrants than any other western province in the first three months of 2010, according to Statistics Canada preliminary population estimates released Monday.

The federal agency said a net total of 300 people moved to Alberta from other provinces in January, February and March. That`s the lowest number since 1994.

The low level of migration to Alberta in the first quarter undermines an argument used repeatedly by Employment and Immigration Minister Thomas Lukaszuk, who says job-seeking newcomers are inflating Alberta`s labour force -- and thus its jobless numbers. A ministry spokesman did not immediately respond to a request for comment.

For a moving company such as Mayflower Canada/United Van Lines, the trend means more sofas, televisions and other household possessions hauled out of Alberta than in.

"2009 was fairly flat when it came to migration in and out of Alberta," Marc Gosselin, vice-president of operations for Mayflower/United said in an e-mail.

"However, 2010 illustrates a significant imbalance in migration leaving the province."

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[Amber]

Alberta`s fiscal picture brightens

When a deficit is 80% lower than projected, it`s a very big deal

EDMONTON - I know this will be hard, people, but can you stomach some good news for a change?

Alberta`s 2009-10 budget deficit, announced Thursday, came in at just $1 billion.

That`s nearly 80 per cent below the massive $4.7-billion hole the province initially projected in the spring of 2009.

With world leaders gathered in Ontario for the G-8 and G-20 summits, and the Oilers` Taylor-versus-Tyler debate heading into its dramatic final chapter Friday evening, it`s no wonder the deficit news got short shrift in the media.

Still, this is a very big deal. It means the province`s finances -- unlike those of much of the rest of the western world, from Greece to Quebec to California -- aren`t going to hell in a handbasket after all.

That`s disappointing for local headline writers, perhaps, but good news for Alberta taxpayers.

As of March 31, Alberta was still sitting on roughly $15 billion in its Sustainability Fund -- a fund some critics once predicted could run dry in just a year or two. Barring another global economic collapse, that dire forecast seems pretty far-fetched now.

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[Amber]

Enbridge invests $400M in oil sands pipeline link

Increased activity in Alberta`s oil sands region has prompted Enbridge Inc. to invest $400 million toward expanding its regional system from the Fort McMurray area to its Edmonton terminal, the oil pipeline giant said Monday.

The three-year expansion of the Waupisoo Pipeline, which runs 380 kilometres from the northeast corner of Alberta to a terminal in Edmonton, will accommodate about 229,000 barrels per day of additional capacity by mid-2013.

The push in volumes will start adding to its bottom line within three years, Enbridge said.

"The Waupisoo expansion program will begin to contribute to our growth in earnings per share by 2013, and increasingly thereafter as the volumes increase to the full commitment levels," chief executive Pat Daniel said in a statement.

Capacity on the system will expand to accommodate up to 255,000 new barrels per day. Waupisoo currently flows approximately 350,000 barrels of crude.

New and delayed projects in Alberta`s oil sands have gathered new steam this year on steadily rising oil prices. Activity in the region came to a virtual standstill in 2008 when the price of oil dropped and access to credit was strangled.

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[Amber]

House prices likely to rise 5%-7% in Calgary: Conference Board

The short-term year-over-year price growth expectation for Calgary`s resale housing market is in the range of five to seven per cent, says the Conference Board of Canada.

In its latest Metro Resale Index released today, the board placed Calgary in the second highest level of price growth expectation which includes Victoria, Vancouver, the Fraser Valley, Regina, Halifax and Newfoundland.

The board surveyed 28 Canadian markets.

Leading the country in short-term year-over-year price growth expectation of seven per cent or more was Edmonton, Saskatoon, Gatineau, Montreal, Quebec City, Sherbrooke, Trois-Rivieres and Saguenay.

The index classified Calgary as being in a buyer`s market.

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[Amber]

Money flows to housing construction in Alberta


CALGARY - New investment in Alberta housing construction ballooned in April compared with a year ago.

According to Statistics Canada data, investment totalled $698.9 million in the province during that month, up significantly from $431.8 million in April 2009.

In the single home sector, investment jumped from $304.7 million a year ago to $588.8 million this year.

According to Statistics Canada, total investment in housing construction across the country was almost $3.3 billion in April which was up from $2.7 billion a year ago.

In the single home category, total investment on a year-over-year basis increased from $1.4 billion to $2.2 billion in April.

Recently, housing experts said the pace of residential construction in the Calgary region would start to slow down in the second half of this year with higher mortgage rates, tighter lending rules and more resale homes on the market putting a damper on housing starts.

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